Lawmakers Accuse IRS Officials of Lying in Scandal

Ousted acting IRS Commissioner Steven Miller is sworn in at Friday's hearing.
Nicolas Kamm | AFP | Getty Images
Ousted acting IRS Commissioner Steven Miller is sworn in at Friday's hearing.

Lawmakers accused leaders of the Internal Revenue Service of lying on Friday as they opened the first in a series of investigative hearings about the tax collection agency's targeting of conservative groups.

Republicans and Democrats said senior IRS officials should have alerted Congress last year when they found out that their examiners were singling out Tea Party groups for intense scrutiny when the groups applied for tax-exempt status.

"That isn't being misled. That's lying," said Republican Dave Camp, chairman of the House of Representatives Ways and Means Committee.

The acting head of the agency, Steven Miller, apologized for the IRS's actions and said they stemmed from poor management, rather than a partisan desire to punish conservative groups.

"I did not mislead Congress or the American people," said Miller, who was fired by President Barack Obama on Wednesday. "I think what happened here is that foolish mistakes were made by people trying to be more efficient."

He said he could not say who had come up with the idea to single out conservative groups for intense scrutiny when they applied for tax-exempt status.

"I don't have names for you," Miller told the committee. He denied that IRS agents targeted conservative groups based on ideology.

Late in the day, the Treasury Department said Secretary Jack Lew met with incoming Acting IRS Commissioner Daniel Werfel and asked for a "thorough review" of the agency. Werfel was also asked to report to President Obama in 30 days about the progress he's made making repairs.

At the hearing, Miller acknowledged that the agency planned its initial disclosure about having targeted conservative groups through a planted question at a lawyers' conference.

"It was a prepared Q and A," Miller said when asked about IRS official Lois Lerner's response to a question from a lobbyist at an American Bar Association conference last week.

When pressed whether the question was planted, Miller said, "I believe that we talked about that, yes."

Miller did not elaborate on why the IRS chose such a strategy to reveal what has become a scandal over whether the tax agency treated some conservative groups fairly.

Without identifying lower-level IRS employees involved, Miller initially said that one employee had been disciplined because of the scandal, then later said two had been disciplined.

He asked budget-cutting Republicans to give his agency more funds to beef up tax enforcement at the IRS, suggesting that the agency's difficulty in handling waves of applications by tax-exempt groups had been a factor in grouping conservative organizations for review.

Miller sometimes seemed defiant, as he grimaced and threw up his hands while answering questions.

At one point, Miller said he did not think the IRS had broken any laws when it drew up its targeting list—a response that elicited "wow" from Republicans on the committee.

Republicans have angrily accused Obama's administration of using government powers to target political foes. They say the IRS scandal is one example of a federal government that has grown too large and intrusive.

"Is this still America?" asked Republican Rep. Kevin Brady of Texas.

(Read More: For Obama, Harsh Reality Overshadows Vision)

Obama is racing to get in front of a scandal that threatens to eclipse his second-term agenda. He has twice appeared in public to condemn the IRS's actions and has promised to cooperate with three congressional investigations and a Justice Department probe. He has, however, resisted demands for a special prosecutor to look into the allegations.

An Explosion of Advocacy Groups

An internal IRS watchdog reported this week that IRS investigators had singled out groups that had conservative-sounding phrases such as "patriot" and "tea party" in their titles when they applied for a tax-exempt status.

(Read More: How to Tell If the IRS Is Eyeing You)

Such status allows groups to keep their donor lists secret while engaging in limited political activity. Political campaigns, by contrast, must make their donors lists public.

Tea party groups say they were asked for information such as what books they read. The questioning in some cases took nearly three years, preventing certain groups from participating in the 2010 and 2012 elections.

The IRS watchdog blamed the scandal on ineffective management and bureaucratic confusion.

(Read More: IRS Screenings Showed 'Lack of Sensitivity': Chief)

The IRS has seen the number of groups applying for so-called 501(c)4 status double in the wake of a January 2010 Supreme Court decision that loosened campaign-finance rules at a time when it has struggled to monitor existing tax-exempt groups.

The top Democrat on the committee, Rep. Sander Levin of Michigan, warned Republicans not to turn the investigation into a partisan witch hunt.

However, he noted that Lois Lerner, the IRS official who made the scandal public last week, did not bring it up when she testified in front of the committee a few days earlier.

(Read More: IRS 'Culture of Discrimination': Camp)

"That is wholly unacceptable and one of the reasons we believe Miss Lerner should be relieved of her duty," Levin said.

Two other committees, the House Oversight and Government Reform Committee and the Senate Finance Committee, also will hold IRS hearings next week.

_ By Reuters